Garmin (NYSE:GRMN – Get Free Report) and PulteGroup (NYSE:PHM – Get Free Report) are both large-cap consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, dividends, earnings and risk.
Earnings & Valuation
This table compares Garmin and PulteGroup”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Garmin | $7.25 billion | 7.82 | $1.66 billion | $10.42 | 28.20 |
| PulteGroup | $17.31 billion | 1.38 | $2.22 billion | $9.36 | 13.84 |
PulteGroup has higher revenue and earnings than Garmin. PulteGroup is trading at a lower price-to-earnings ratio than Garmin, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current ratings and target prices for Garmin and PulteGroup, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Garmin | 1 | 5 | 3 | 1 | 2.40 |
| PulteGroup | 1 | 9 | 10 | 1 | 2.52 |
Garmin currently has a consensus price target of $315.29, indicating a potential upside of 7.29%. PulteGroup has a consensus price target of $136.76, indicating a potential upside of 5.56%. Given Garmin’s higher possible upside, research analysts clearly believe Garmin is more favorable than PulteGroup.
Dividends
Garmin pays an annual dividend of $4.20 per share and has a dividend yield of 1.4%. PulteGroup pays an annual dividend of $1.04 per share and has a dividend yield of 0.8%. Garmin pays out 40.3% of its earnings in the form of a dividend. PulteGroup pays out 11.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Garmin has raised its dividend for 8 consecutive years and PulteGroup has raised its dividend for 7 consecutive years. Garmin is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Garmin and PulteGroup’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Garmin | 25.58% | 21.94% | 17.81% |
| PulteGroup | 11.24% | 14.29% | 10.19% |
Institutional & Insider Ownership
81.6% of Garmin shares are held by institutional investors. Comparatively, 89.9% of PulteGroup shares are held by institutional investors. 14.8% of Garmin shares are held by company insiders. Comparatively, 0.7% of PulteGroup shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Volatility and Risk
Garmin has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, PulteGroup has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.
Summary
Garmin beats PulteGroup on 10 of the 17 factors compared between the two stocks.
About Garmin
Garmin Ltd. develops, manufactures and markets navigation, communication and information devices and applications. Its products include GPS-enabled watches and fitness trackers, handheld outdoor navigation devices, marine electronics, aviation systems and automotive navigation technology. Founded in 1989 by Gary Burrell and Min Kao, Garmin serves consumers and businesses around the world. Its products are used in activities ranging from fitness and outdoor recreation to boating, aviation and transportation.
About PulteGroup
PulteGroup, Inc. is a U.S. homebuilding company that develops and builds residential communities. Its brands include Pulte Homes, Centex, Del Webb, DiVosta and John Wieland Homes and Neighborhoods, serving a range of buyers from first-time homeowners to active adults. The company traces its origins to 1950, when founder William J. Pulte began building homes in the Detroit area. PulteGroup has since expanded its homebuilding operations across numerous markets in the United States. In addition to constructing and selling homes, PulteGroup offers mortgage lending and related services through Pulte Mortgage and affiliated businesses.
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